“The impact of the BP spill was a drop in the bucket compared to the impact of the oil industry on Louisiana.”

Published: Wednesday, November 2, 2011 at 4:44 p.m.

Last Modified: Wednesday, November 2, 2011 at 4:44 p.m.

The year before the 2010 Deepwater Horizon disaster, the extraction, refining and pipeline industries supported 310,217 jobs, generated more than $16 billion in household earnings and more than $77 billion in sales for businesses in Louisiana, according to report released last month by a state economist.

The report by Loren Scott, a Baton Rouge-based economist and consultant, shows that the industries paid nearly $1.4 billion in direct taxes to the state treasury last year, and a “conservative estimate” shows that they paid $298 million in ad valorem taxes to local governments in 2009.

“These findings make a compelling case about the major role the extraction, refining and pipeline industries play in the state economy, particularly relative to jobs,” said Chris John, president of the Louisiana Mid-continent Oil and Gas Association. “On average, the job multiplier for these three industries is five. That is, for every job created in these sectors four additional jobs are created through other sectors in the state. In today's economy, the significance of that statistic is huge.”

Taking “value added” into account, which means a broader measure of the total income created by extraction and refining, the numbers swell to nearly $55 billion.

“Louisiana won the flip of the coin when it came to the geographical distribution of natural resources and this data clearly demonstrates the development of these resources by industry have had staggering direct and indirect impacts across all parishes of the state,” Scott said.

That same flip of the coin, however, comes with immense environmental costs, which a prominent Tulane law professor who specializes in environmental law says have never been fully calculated.

“The impact of the BP spill was a drop in the bucket compared to the impact of the oil industry on Louisiana,” said Oliver Houck, who received the Distinguished Achievement Award from the Environmental Section of the American Bar Association in 2005.

The damages done from hundreds of open oil-and-gas waste pits across the state, thousands of miles of access and pipeline canals cut through the state's sensitive coastal marshes, decades of spills and leaks and the immense spiderwork of abandoned oilfield infrastructure that litter Louisiana have never been tabulated, Houck said.

“To my knowledge, no one has ever put dollar figures on those costs,” he said.

The oil-and-gas industry can only claim “an enormous economic boon” by ignoring the costs of cleaning up the mess it has left behind, he added.

“There are very few metrics, but the metrics we have are eye-popping. What we're destroying is going to be astonishingly costly to repair,” Houck said.

For example, it costs the state about $200,000 to restore an acre of marsh, Houck said, meaning the costs of restoring the vast amount of acreage lost to saltwater intrusion speeded by the canals oil-and-gas companies cut through marshes will be immense.

“You've got a hell of a bill that no one has ever presented to the industry,” he said. “I'm not saying that the industry doesn't produce jobs. I'm not saying the industry doesn't produce revenue for the state, but it's pitifully lowballed ... The royalties they pay to the state are based on very lowball measures.”

The Deepwater Horizon disaster, which killed 11 workers and caused the worst offshore oil spill in U.S. history, also demonstrated the state's complex relationship with the oil-and-gas industry.

As crude continued to wash into marshes in coastal parishes and sloshed onto beaches on Grand Isle, politicians and industry vocally fought against the six-month drilling moratorium imposed by the federal government to revamp offshore regulations and the permitting and inspection processes.

They continue to blast what they say is a slow pace of permits and approvals.

Meanwhile, fishermen across the state, who are struggling with low catch numbers they blame on chemical dispersants used during the spill, a claims process many call a “joke” and a national market leery of Gulf seafood, say few politicians have their interests at heart.

Oyster crops were decimated by freshwater diversions intended to keep the spill out of coastal marshes, but prices remain low because of fears about Gulf seafood.

Many fishermen have worked at one time or another in oil and gas and know that the state depends on the industry, but many wonder why drilling is all anyone seems worried about.

“You'd think our officials would be screaming about getting paid,” said Kim Chauvin, who, with her husband David, owns a fleet of shrimp boats and a dock.

“It's pathetic how quickly we forget about the industry that was taken advantage of.”

<p>The year before the 2010 Deepwater Horizon disaster, the extraction, refining and pipeline industries supported 310,217 jobs, generated more than $16 billion in household earnings and more than $77 billion in sales for businesses in Louisiana, according to report released last month by a state economist.</p><p>The report by Loren Scott, a Baton Rouge-based economist and consultant, shows that the industries paid nearly $1.4 billion in direct taxes to the state treasury last year, and a “conservative estimate” shows that they paid $298 million in ad valorem taxes to local governments in 2009. </p><p>“These findings make a compelling case about the major role the extraction, refining and pipeline industries play in the state economy, particularly relative to jobs,” said Chris John, president of the Louisiana Mid-continent Oil and Gas Association. “On average, the job multiplier for these three industries is five. That is, for every job created in these sectors four additional jobs are created through other sectors in the state. In today's economy, the significance of that statistic is huge.”</p><p>Taking “value added” into account, which means a broader measure of the total income created by extraction and refining, the numbers swell to nearly $55 billion. </p><p>“Louisiana won the flip of the coin when it came to the geographical distribution of natural resources and this data clearly demonstrates the development of these resources by industry have had staggering direct and indirect impacts across all parishes of the state,” Scott said.</p><p>That same flip of the coin, however, comes with immense environmental costs, which a prominent Tulane law professor who specializes in environmental law says have never been fully calculated. </p><p>“The impact of the BP spill was a drop in the bucket compared to the impact of the oil industry on Louisiana,” said Oliver Houck, who received the Distinguished Achievement Award from the Environmental Section of the American Bar Association in 2005. </p><p>The damages done from hundreds of open oil-and-gas waste pits across the state, thousands of miles of access and pipeline canals cut through the state's sensitive coastal marshes, decades of spills and leaks and the immense spiderwork of abandoned oilfield infrastructure that litter Louisiana have never been tabulated, Houck said. </p><p>“To my knowledge, no one has ever put dollar figures on those costs,” he said.</p><p>The oil-and-gas industry can only claim “an enormous economic boon” by ignoring the costs of cleaning up the mess it has left behind, he added.</p><p>“There are very few metrics, but the metrics we have are eye-popping. What we're destroying is going to be astonishingly costly to repair,” Houck said.</p><p>For example, it costs the state about $200,000 to restore an acre of marsh, Houck said, meaning the costs of restoring the vast amount of acreage lost to saltwater intrusion speeded by the canals oil-and-gas companies cut through marshes will be immense. </p><p>“You've got a hell of a bill that no one has ever presented to the industry,” he said. “I'm not saying that the industry doesn't produce jobs. I'm not saying the industry doesn't produce revenue for the state, but it's pitifully lowballed ... The royalties they pay to the state are based on very lowball measures.”</p><p>The Deepwater Horizon disaster, which killed 11 workers and caused the worst offshore oil spill in U.S. history, also demonstrated the state's complex relationship with the oil-and-gas industry. </p><p>As crude continued to wash into marshes in coastal parishes and sloshed onto beaches on Grand Isle, politicians and industry vocally fought against the six-month drilling moratorium imposed by the federal government to revamp offshore regulations and the permitting and inspection processes. </p><p>They continue to blast what they say is a slow pace of permits and approvals. </p><p>Meanwhile, fishermen across the state, who are struggling with low catch numbers they blame on chemical dispersants used during the spill, a claims process many call a “joke” and a national market leery of Gulf seafood, say few politicians have their interests at heart. </p><p>Oyster crops were decimated by freshwater diversions intended to keep the spill out of coastal marshes, but prices remain low because of fears about Gulf seafood. </p><p>Many fishermen have worked at one time or another in oil and gas and know that the state depends on the industry, but many wonder why drilling is all anyone seems worried about.</p><p>“You'd think our officials would be screaming about getting paid,” said Kim Chauvin, who, with her husband David, owns a fleet of shrimp boats and a dock. </p><p>“It's pathetic how quickly we forget about the industry that was taken advantage of.”</p><p></p><p>City Editor Robert Zullo can </p><p>be reached at 448-7614 or </p><p>robert.zullo@houmatoday.com.</p>